Apple Reveals iPhone OS Version 3

Several unnamed sources with ties to Apple tell the paper that the Cupertino-based company is indeed working on ways to make the next generation of iPhones cheaper but not by making it smaller.

They cite smaller iPhones as being too difficult to navigate with a touchscreen and Apple not wanting to force app developers to redesign their apps for a different sized screen as reasons why the iPhone won't get smaller.

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Apple is reportedly looking to change the internals of the next generation iPhones to cut costs and it is looking to make the phone more voice command friendly, so users can control the iPhone without having to touch the screen.

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The next generation iPhone could also have better cloud service, with Apple reportedly improving its MobileMe service and eliminating the $100 annual fee.